Unit 4 - Real Estate Agency

Question 1

Define Statutory Law

Answer 1

The laws, rules & regulations enacted by legislatures

Question 2

Define Common Law

Answer 2

The rules of a society established by court decisions

Question 3

Define General Agency

Answer 3

The relationship of the broker. managing broker or leasing agent

Question 4

Agency relationships in Illinois are governed under which law?

Answer 4

Under statutory law & based on Article 15 of the Real Estate License Act of 2000

Question 5

Define Agency

Answer 5

A relationship in which a real estate broker or licensee represents a consumer with the consumers consent

Question 6

Define Agent

Answer 6

The individual who is authorized and consents to represent the interest of another person

Question 7

Define a Brokerage Agreement

Answer 7

An agreement between a sponsoring broker and a consumer for licensed activities to be provided

Question 8

Define a Consumer

Answer 8

A person or entity seeking or receiving licensed activities

Question 9

Define a Client

Answer 9

A person who is being represented by a licensee

Question 10

Define a Customer

Answer 10

A consumer who isnt being represented but is receiving ministerial acts

Question 11

Define Ministerial Acts

Answer 11

Acts that a licensee may perform for a consumer that are informative or clerical

Question 12

Define a Principle

Answer 12

The client to whom the agent gives advise and counsel

Question 13

Define a Fiduciary

Answer 13

One who is placed in a position of trust and confidence

Question 14

What are the Fiduciary Duties

Answer 14

Care
Obedience
Loyalty
Disclosure
Accounting
Confidentiality

Question 15

Duty of Care

Answer 15

The agent should know all facts pertinent to the principles affairs

Question 16

Duty of Obedience

Answer 16

The fiduciary relationship obligates the agent to act in good faith at all times

Question 17

Duty of Loyalty

Answer 17

Illinois license law prohibits a licensee to serve as a dual agent in any transaction in which they are a party to the transaction

Question 18

Duty of Disclosure

Answer 18

The agent is obligated to disclose facts that a reasonable person would feel are important in choosing a course of action

Question 19

Duty of Accounting

Answer 19

Illinois licensees are required to deliver true copies of all executed or initialed documents within 24 hours

Question 20

Duty of Confidentiality

Answer 20

Client information that can affect negotiations must be kept confidential

Question 21

Define Conversion/Commingling

Answer 21

The practice of using escrow funds as the licensees own money which is illegal

Question 22

Define a Material Fact

Answer 22

Any fact that, if known, may reasonably be expected to affect the course of events

Question 23

Opinion vs Fact

Answer 23

Real Estate licensees and staff members must always be careful that the consumer understands whether a statement is opinion or fact

Question 24

Define Puffing

Answer 24

Generalized, vague, exaggeration of a properties benefits

Question 25

Define Negligent Misrepresentation

Answer 25

Occurs when the licensee shouldve known that a statement about a material fact was false

Question 26

Illinois Real Estate License Act

Answer 26

Clearly states that a licensee shall not be liable to a client for providing false info if the false info was provided by the customer

Question 27

Define Latent Defect

Answer 27

A structural defect that would not normally be uncovered over the course of an ordinary inspection

Question 28

Define Stigmatized Properties

Answer 28

Properties that society has branded undesirable because of events that occurred there

Question 29

Define Megans Law

Answer 29

A general name for state and federal laws requiring law enforcement to make registered sex offender information public

Question 30

How can an agency be formed?

Answer 30

Based on a formal agreement (express agency) or from the parties behavior (implied agency)

Question 31

Real Estate License Act of 2000

Answer 31

Requires that all exclusive brokerage agreements be in writing

Question 32

Define Gratuitous Agency

Answer 32

An agency that exists even if no fee is involved

Question 33

In Illinois...

Answer 33

The licensee is required to disclose to a client the sponsoring brokers compensation and policy

Question 34

In Illinois...

Answer 34

Licensees are not allowed to obtain a written brokerage agreement that doesn't expire automatically

Question 35

Define an Agency Coupled with an Interest

Answer 35

The agent has an interest in the subject of the agency, such as the property being sold

Question 36

Define a Universal Agent

Answer 36

A person empowered to do anything the principle could do personally

Question 37

Define a General Agent

Answer 37

May represent the principle in a broad range of matters related to a particular business/activity

Question 38

Define a Special Agent

Answer 38

Authorized to represent the principle in one specific act or business transaction

Question 39

Define a Designated Agent

Answer 39

A person authorized by the sponsoring broker to act as the agent of a specific principle

Question 40

Define Single Agency

Answer 40

When an agent/firm represents only one party exclusively in a real estate transaction

Question 41

Define Dual Agency

Answer 41

The agent represents 2 principles in the same transaction (requires consent from both parties)